Why collaboration with universities is the key to SME innovation

Some of the greatest assets available to Australian SMEs and large companies lie untapped.

A recent OECD study shows Australia is lagging embarrassingly far behind other developed economies when it comes to active collaboration between universities and business.

We are 18th on the ladder, with only 3.5% of large companies and 4.1% of small and medium size firms reported to be collaborating with universities or public research organisations. Finland tops the list with 70% and 29% respectively.

Yet universities and other research organisations have so much to offer business with the capacity to unlock potential through innovation.

Why the reluctance to get together?

There are many reasons for this. Most universities don’t present a welcoming face and are very hard to find a way into. All too often, collaborative, commercial projects are a low priority. Most SMEs on the other hand, are not aware of what’s possible or what’s on offer, so they don’t think it would be worth the effort of trying.

In fact, universities are an Aladdin’s cave of opportunities and innovation. They can offer consultancies, contract research, access to the latest equipment and facilities, product development, staff training and expert advice in a very broad range of areas. They can also offer applied research and development partnerships, analysis and testing, and even collaboration on government grant applications.

Fortunately, as a former small business owner, I was more aware than most of the potential. I lectured in universities and was RMIT’s first entrepreneur in residence.

My eyes have been opened even further in my current role as Victoria’s shadow minister for innovation, as I’ve had the opportunity to visit some really exciting university centres and facilities that are working with SMEs and large companies to build new ideas and industries.

Take Swinburne University of Technology’s Factory of the Future, which is part of its Advanced Manufacturing and Design Centre. Its cutting edge facilities test and develop ideas for next generation methods and products in collaboration with businesses. The centre has joint research projects in numerous areas including solar and smart structures.

In one example of SME collaboration, Swinburne’s researchers worked with Frankston ConcreteProducts to develop an above ground bushfire shelter that can withstand extreme temperatures. The project brought together the company’s expertise and Swinburne’s knowledge of design and human factors. The Sanctuary Bushfire Shelter is now on the market.

Universities can collaborate with SMEs on consultancies, contract research and provide expert advice in virtually any area of business including marketing, finance, retailing and agriculture. So it’s not only technology based firms that can benefit.

Breaking down the walls

In Australia, we are just scratching the surface of what can and should be done if we are to break down the university walls and really unleash the potential for innovation and collaboration.

Universities need to re-think their roles and operations in a fundamental way. This very sentiment has been echoed by Prime Minister Malcolm Turnbull, who recently declared he wants to put an end to the “publish or perish” approach from academics for their work. Instead of a focus on a constant stream of research, academics will now be encouraged to produce work with more commercial and community benefit.

The current emphasis on research publication needs to be balanced with ability to work successfully with industry and SMEs. Similarly, academic staff recruitment needs to take account of practical, commercial experience and an open, flexible approach to collaboration. 

To allow SMEs to flourish and innovate, they first need to know what is possible and how to connect with universities to then take the leap.

There needs to be a raft of practical programs to bring together business and universities so they can understand each other’s priorities and needs and to close the existing gaps.

On a very basic level, too many universities appear impenetrable to SMEs. Even their websites don’t make it easy to locate specialist areas or central administration groups that can give information and facilitate introductions.

We have so much talent, skill and knowledge in SMEs, universities and the CSIRO. Bringing these groups together for productive partnerships and commercial outcomes is not only overdue, it’s essential.

The best partnerships are about mutual benefit. Greater SME access to and collaboration with universities is a win-win for both parties and can make a real difference to unlocking the innovation potential in so many Australian businesses.

Are we willing to accept that Turkey, New Zealand and Mexico are above us on the OECD collaboration ladder?

If so, we risk consigning ourselves to a stagnant, low-growth, low-income future with few meaningful well paid jobs for generations to come. 

If not, we need to act now and break down the walls between universities and SMEs.

David Southwick if the Member for Caulfield and the Victorian shadow minister for innovation, energy and resources, and renewables.